Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Bill Chatterton
MicroStrategy Incorporated
(703) 848-8600
IR@microstrategy.com
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MicroStrategy Reports 48% Revenue Growth for Fiscal Year 2000
Company Reports Revenue of $58.1 Million for Fourth Quarter,
$224 Million for Fiscal Year
VIENNA, Va., February 6, 2001 - MicroStrategy(R) Incorporated (NASDAQ:
MSTR), a leading worldwide provider of business intelligence software, today
announced results for the three month period ended December 31, 2000, which was
the fourth quarter of its 2000 fiscal year.
Financial Overview
The Company reported revenues for the fourth quarter of 2000 of $58.1
million, compared to $46.2 million in the same quarter of 1999, representing a
26% increase. The Company reported a net operating loss, which excludes certain
charges, for the fourth quarter of 2000 of $24.9 million, or $0.31 per share.
This compares with an operating loss, also excluding certain charges, of $14.0
million or $0.18 per share for the fourth quarter of 1999. The company narrowed
its loss by 17% versus the comparable third quarter 2000 net operating loss of
$29.9 million. For the twelve months ending December 31, 2000, revenues grew 48%
from $151.3 to $223.9 million.
"We are pleased with the fourth quarter results announced today," said
Michael J. Saylor, chairman and CEO of MicroStrategy Incorporated. "We have
made significant improvement to our cost structure while still achieving an
annual growth rate of 48%. We believe we are well on our way toward achieving
our financial goal of becoming profitable in our core business by Q4 2001. These
actions show that MicroStrategy is well positioned to continue exerting a
leadership role in the business intelligence market. For the year 2001, our
priorities are clear: profitability, market share and revenue growth, in that
order."
Quarterly Highlights
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The Company achieved a number of important operating achievements, including:
Sales & Marketing
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. The Company signed a multi-million dollar deal with FleetBoston Financial,
the nation's eighth largest diversified financial services company with $181
billion in assets. The deal calls for MicroStrategy's
technology to be used as an enterprise platform for FleetBoston's business
intelligence and customer relationship management applications in a portal
environment.
. The Company added 83 new customers across a broad range of industries during
the quarter, bringing the worldwide total to more than 1,100. New customers
include Cybercilium, Deutsche Boerse, Deutsche Telekom AG, France Telecom
Mobiles S.A., La Poste, MacDermid Graphic Arts, Neiman Marcus Online, New
Roads, Soliance Networks, and Wausau Benefits.
. The Company expanded its relationship with several existing customers in the
quarter, including: ALLTEL, AT&T Wireless, Bank of Montreal, BJ's Wholesale,
Capital One, EarthLink, GE Capital Fleet, IMS Health Canada, Lufthansa,
Metropolitan Life Insurance Co., NBCi, Patterson Dental, PETsMART, Premier,
Purina Mills, SC Johnson, 21st Century, and Watkins Motor Lines.
. The Company entered into agreements with 24 system integrators, application
development and platform partners during the quarter, increasing the number
of partners supporting the Company's platform to approximately 320. In
addition, the Company expanded its relationships with PeopleSoft and Compaq.
. The Company expanded its relationship with IBM. The Company's MicroStrategy
7(TM) platform can easily integrate with IBM's WebSphere Everyplace Suite,
Enterprise Edition, a highly scalable server software for connecting wireless
and other Internet ready devices to the web. This integration is designed to
enable customers to develop scalable applications based on an open
architecture with powerful analytics and to allow businesses to distribute
multiple personalized messages to individual users via web, wireless or voice
devices.
Technology
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. The Company launched MicroStrategy OLAP Provider(TM) to customers on a beta
test basis. With MicroStrategy OLAP Provider, business intelligence
applications that utilize other vendors' front-end interfaces can access and
leverage the power of MicroStrategy 7. MicroStrategy OLAP Provider uses the
standard Microsoft OLE DB for OLAP API to communicate with client interfaces
such as Cognos(R) PowerPlay(R), Microsoft(R) Excel 2000, and custom
applications.
. The Company launched MicroStrategy Narrowcast Server 7(TM). MicroStrategy
Narrowcast Server allows organizations to deliver critical information to
users based on business thresholds via many devices and allows users to
immediately act upon that information. These formatted and personalized
messages can be delivered via a full range of electronic media, including e-
mail, pagers, PDAs, Blackberry's, fax machines and wireless phones, allowing
each recipient to receive personalized content in the right context.
. The Company launched MicroStrategy Administrator 7(TM), a comprehensive
administration product for its business intelligence and web reporting
platform, MicroStrategy 7. MicroStrategy Administrator is a powerful set of
tools that reduces the workload of developing, deploying and maintaining
business intelligence applications. MicroStrategy Administrator's easy-to-use
interface enables central maintenance of business intelligence applications
developed on the MicroStrategy 7 platform.
. In January, the Company announced the general availability of MicroStrategy
CRM Applications(TM), a suite of three products for analytical CRM and
marketing automation. These products, built on the MicroStrategy 7
platform, empower companies to build valuable relationships with their
customers by leveraging online and offline customer data to perform
sophisticated customer analysis and personalized, event-based and permission-
based marketing. Neiman Marcus Online and TV Guide have selected
MicroStrategy CRM Applications to power their CRM initiatives.
Strategy.com
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. Strategy.com announced a business relationship with SkyTel, a WorldCom
company. Via its advanced wireless two-way messaging services, Skytel will
now offer customers personalized financial, news and weather reports from
Strategy.com.
. Strategy.com will deliver both syndicated and custom content to customers of
Freedom Communications. Syndicated content includes Strategy.com's finance,
weather and news offerings, and custom content will originate from some of
Freedom Communications' media companies, including newspapers, weekly
publications, broadcast stations, magazines and Internet Media Businesses.
. ING, one of the world's largest integrated financial services organizations,
will offer its advisors access to Strategy.com's finance and news alerts and
reports.
. Strategy.com added 50,000 new subscribers, bringing the total number of
subscribers on the Strategy.com network to more than 510,000.
. James P. Rutt joined Strategy.com's board of directors. Mr. Rutt will join
WorldCom Vice Chairman John Sidgmore, Aether Chairman and CEO Dave Oros, and
MicroStrategy Chairman and CEO Michael J. Saylor on the board. Mr. Rutt
currently serves as CEO of Network Solutions, a VeriSign Company.
. As of January 2001, Strategy.com completed its $52.75 million Series A
investment round.
Corporate
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. The Company was named as one of FORTUNE Magazine's "100 Best Companies to
Work For" for the second consecutive year. The list was announced in the
January 8, 2001, issue of FORTUNE Magazine. MicroStrategy was selected out of
more than 1,000 companies considered for this year's award.
. The Company ranked sixth on the 2000 DM Review 100, an award recognizing the
top 100 business intelligence vendors as selected by the readers of DM Review
magazine. MicroStrategy has been among the top 15 companies awarded the DM
Review 100 in each of the three years that the awards have been given. This
year's award represents an increase in ranking from seventh last year.
. The Company created an Office of the Chairman, led by Chairman and CEO Michael
J. Saylor. The Office of the Chairman consists of Mr. Saylor, Sanju K. Bansal,
who was promoted to Vice Chairman, and Eric F. Brown, who was named President
of MicroStrategy. Mr. Brown will retain his current position as Chief
Financial Officer. The Office of the Chairman has responsibility for corporate
strategy, budgets, market positioning, product development priorities, and
strategic initiatives.
. Arthur S. Locke III, a CPA who brings over 15 years of diversified experience,
joined MicroStrategy as Vice President of Finance. Mr. Locke spent the last
seven years in senior management roles with companies in the
high-tech industry, most recently serving as Chief Financial Officer of a
privately held, development stage wireless broadband telecom company.
Previously, Mr. Locke served three years as Corporate Controller and Assistant
Treasurer at Portal Connect, Inc. (previously, EIS International, Inc.). Mr.
Locke was also employed by PricewaterhouseCoopers as an audit manager and
senior accountant.
. MicroStrategy announced today that Michael J. Saylor, Chairman and CEO, and
Sanju K. Bansal, Vice Chairman and COO, each intend to establish selling
programs under the SEC's recently adopted Rule 10b5-1 covering a portion of
their holdings in MicroStrategy common stock. Mr. Saylor intends to sell
15,000 shares of Class A Common Stock (out of approximately 43 million shares
of common stock currently beneficially held by Mr. Saylor) on each trading day
over the next 24 months. These shares will be sold at market prices with no
limitations on price or other conditions. "This pre-determined plan will allow
me to fund my previously-announced charitable commitment to creating a cyber
university and to diversify approximately 2% of the shares held by me per
quarter," said Mr. Saylor. "I remain strongly confident in the future
prospects of MicroStrategy, as evidenced by the fact that I plan to be holding
nearly 40 million shares a year from now." Mr. Bansal intends to sell up to
$18 million of Class A Common Stock during the first quarter of 2001, and then
between zero and 5,000 shares per trading day (based on market conditions) for
the remainder of 2001. "MicroStrategy shares constitute the vast majority of
my net worth," said Mr. Bansal. "I believe it is prudent to diversify my
investment portfolio and, by availing myself of Rule 10b5-1, my intention is
to diversify my holdings in an orderly manner."
MicroStrategy Reaches Agreements to Settle SEC Inquiry
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In December 2000, the Company resolved the Securities and Exchange
Commission's inquiry into the Company's March 2000 financial restatement.
MicroStrategy concluded the SEC matter without admitting or denying wrongdoing.
The SEC did not assess a monetary penalty against the Company. The Company
cooperated fully with the SEC in its inquiry. The consent order resolving the
SEC inquiry, taken together with the previously announced agreements to settle
the outstanding class action and shareholder derivative lawsuits (which are
subject to court approval and other conditions), will resolve all pending legal
and regulatory matters relating to the Company's March 2000 financial
restatement.
Finance Commentary
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Eric Brown, president and CFO of MicroStrategy, made the following remarks
regarding the Company's fourth quarter results. "Our core operating results
improved versus last quarter as a result of the cost restructuring initiatives
that we put in place. We reduced operating expenses by approximately $9 million,
which is consistent with what we committed to in Q3 2000. I believe that we will
continue to improve our operating efficiencies and bring the core business
results to breakeven by the end of 2001."
Outlook and Financial Guidance Information
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The following statements are subject to risks and uncertainties described at the
end of this press release.
For 2001, the Company expects that total consolidated revenue will increase by
30% compared to 2000. Overall revenue growth for the consolidated business, the
core MicroStrategy software platform business, and the business of the Company's
majority-owned Strategy.com subsidiary, will to a significant extent depend on
market acceptance of the Company's technology and the overall business
intelligence software market growing at 30% as currently expected.
Core MicroStrategy Assumptions for 2001 (excluding Strategy.com)
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For the core MicroStrategy business (excluding Strategy.com), the Company
expects that full year 2001 revenue growth will be approximately 24-28% versus
2000. License revenue as a percent of total core MicroStrategy revenue is
expected to be approximately 48-52%. The Company expects that gross margins on
services revenue will range from approximately 40% in Q1 2001 to approximately
50% by the end of 2001. By quarter, the Company expects the following core
MicroStrategy approximate revenue growth rates versus 2000 quarterly results:
. Q1 2001 + 7-12% versus Q1 2000
. Q2 2001 + 22-27% versus Q2 2000
. Q3 2001 + 20-25% versus Q3 2000
. Q4 2001 + 42-47% versus Q4 2000
Under the assumption that the core MicroStrategy revenue forecast is achieved,
we expect the following approximate operating expenditures in 2001:
Sales and Marketing - quarterly expenditures of $32 million to $41 million
Research and Development - quarterly expenditures of $8 million to $13 million
General and Administrative - quarterly expenditures of $8 million to $12 million
Goodwill Amortization - expected to be similar in absolute dollars ($4 million
to $5 million per quarter) as during 2000
The Company expects that capital spending in the core MicroStrategy business
will be approximately $4 million to $8 million for 2001. The Company expects
that the core MicroStrategy business will achieve breakeven operating results
(excluding goodwill amortization and other non-recurring items) by Q4 2001.
Strategy.com Assumptions for 2001
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For the Company's Strategy.com subsidiary, the Company expects that full
year 2001 revenue will be approximately 30-40% license and approximately 60-70%
services with a total revenues approximately doubling versus full year 2000
results. 2001 sequential quarterly revenue growth rates are expected to be
approximately as follows:
. Q1 2001 + 20-40% versus Q4 2000
. Q2 2001 + 20-40% versus Q1 2001
. Q3 2001 + 35-55% versus Q2 2001
. Q4 2001 + 35-55% versus Q3 2001
Total gross profit margins are expected to grow from approximately negative 10%
in Q1 2001 to as much as positive 50% by the end of 2001. Operating costs are
expected to total approximately $7 million to 9 million in each quarter.
Assuming the Strategy.com revenue forecast is achieved, quarterly operating
expenses are expected to be: Sales and Marketing equal to 24-30% of total
operating expenses, Research and Development equal to 42-48% of total operating
expenses and General and Administrative equal to 25-31% of total operating
expenses. The Company expects that capital spending in Strategy.com will be
approximately $2 million to $7 million for 2001.
The attached summary of financial highlights compares the 2000 fourth quarter
results to the same period last year.
MicroStrategy will hold a conference call chaired by Michael Saylor today at
5:30 p.m. (EST). Investors can call (800) 659-8292, or for international (904)
779-4702, prior to 5:30 p.m. (EST). A replay will be available for 48 hours
after the call at (800) 252-6030, or for international (402) 220-2491, with
access code 7829027. Also, a live Webcast and replay can be accessed at the
investor relation section of the MicroStrategy web site, www.microstrategy.com,
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or from the StreetEvents site, www.streetevents.com.
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About MicroStrategy Incorporated
MicroStrategy is a leading worldwide provider of business intelligence
software and related services. MicroStrategy's technology platform enables
companies to build solutions that provide powerful insight into business
operations and create lasting, profitable relationships with partners, supply-
chains, and customers. MicroStrategy delivers these solutions via web,
wireless, and voice. MicroStrategy also offers a comprehensive set of
consulting, training and support services for its customers and partners.
MicroStrategy has approximately 1,100 customers across such diverse
industries as retail, finance, telecommunications, dot-com, insurance,
healthcare, pharmaceuticals and consumer packaged goods. MicroStrategy also has
entered into relationships with approximately 330 systems integrators,
application development and platform partners.
For more information, or to purchase or demo MicroStrategy's software,
please visit MicroStrategy's Web site at http://www.microstrategy.com.
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MicroStrategy, MicroStrategy 7, Strategy.com, MicroStrategy OLAP Provider,
MicroStrategy Administrator, MicroStrategy Narrowcast Server and MicroStrategy
CRM Applications are either trademarks or registered trademarks of
MicroStrategy Incorporated in the United States and certain other countries.
Other product and company names mentioned herein may be the trademarks of their
respective owners.
This press release may include statements that may constitute "forward-looking
statements," including its estimates of future business prospects or financial
results and statements containing the words "believe," "estimate," "project,"
"expect" or similar expressions. Forward-looking statements inherently involve
risks and uncertainties that could cause actual results of MicroStrategy
Incorporated (the "Company") to differ materially from the forward-looking
statements. Factors that could contribute to such differences include: the
possibility that the securities class action and shareholder derivative
settlement agreements will not obtain court approval or that the other
conditions to the settlements will not be satisfied; the Company's ability to
secure financing for its current operations and long-term plans on acceptable
terms; the ability of the Company to implement and achieve widespread customer
acceptance of its MicroStrategy 7 software and Strategy.com network on a timely
basis; adverse reaction by the Company's employees, investors, customers,
vendors and lenders to the restatement of the Company's financial results or its
future prospects; the Company's ability to recognize deferred revenue through
delivery of products or satisfactory performance of services; continued
acceptance of the Company's products in the marketplace; the timing of
significant orders; delays in the Company's ability to develop or ship new
products; market acceptance of new products; competitive factors; general
economic conditions; currency fluctuations and other risks detailed in the
Company's registration statements and periodic reports filed with the Securities
and Exchange Commission. By making these forward-looking statements, the Company
undertakes no obligation to update these statements for revisions or changes
after the date of this release.